Chips Sales Top a Trillion in 2016

Global semiconductor unit shipments, including integrated circuits and optical, sensor, and discrete (OSD) devices are slated to break the 1 trillion mark in 2016, according to a new report.
The news comes as semiconductor unit growth is expected to increase to about 8% this year, according to a February 18 report by IC Insights. In 2015, shipments are projected to grow 11% and then 12% in 2016, pushing the industry past the 1 trillion mark for the first time.

After 2016, shipments of a trillion or more chips is expected to become the norm. The forecast is based on data published in the 2014 edition of “The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry.” While the sheer number of semiconductor shipments is impressive, the report also takes the long view of the past four decades to show how far the industry has come.

For example, in 1978 semiconductor unit shipments totaled 32.6 billion. During the next 36 years, the average annual growth rate averaged 9.4% -- a testament to the increasing reliance on semiconductors in different aspects of modern life. However, the market is not without its slumps. Between 2008 and 2013, the annual growth rate slowed to just about 5% as a result of a worldwide economic recession. Now that most of the global economy has recovered, the growth rate is expected to reach 8%, a sign that the industry has not suffered any long-term effects and that the desire for semiconductors is still strong, especially in the increasingly popular mobile market.

The report’s historic information finds that semiconductors first topped the 100-billion shipment mark in 1987. From there, it took another 19 years, until 2006, for the market to reach 500 billion units. The next 100-billion unit mark was achieved the very next year, as the market topped 600 billion units in 2007. Thus the total of unit shipments of semiconductors has steadily increased at higher rates over time, bringing about each milestone at a quicker pace compared to the last. That is thanks in part of the consumer market and the explosive growth of items from smartphones to game consoles.

Since 1978, the percentage of ICs and OSD devices among total semiconductor shipments has remained about the same, in spite of various changes in the industry and advances in integrated circuit technology. ICs made up 21% of semiconductor units in 1978, whereas OSD devices accounted for 79% of total units. In 2016, OSD devices are expected to make up 74% of total semiconductor units compared to 26% for ICs.

A trillion chips a year means that on average each human being on the planet is getting 140 new chips a year. Since some people don't get any, that means that others of us are getting even more. Is this remarkable number inflated because there are many discrete components in each consumer device? How do chip sales translate into device sales? How many chips would be reported for an iPhone? How many for a laptop computer? How many for a modern car?

Hi Zewde - per the subject of my post (Subject Of Your Article Slightly Confusing) I was "taken aback" by the words chip sales and one trillion. If you added the word "units" before sales in your headline it would be, I believe, non-confusing. Of course the first four words of the lead-in sentence in your article captures the "real meaning," namely, Global semiconductor unit shipments.Mike C.